In FY 2013, the Japanese economy followed a recovery path as the yen weakened and the stock market performed strongly, with Abenomics delivering on some of its promises. In Japan, where the deflationary trend persisted for more than a decade, the inflationary trend in prices is finally beginning to take root. As the business performance of Japanese companies improved, the overall trend in wages turned upward, putting an end to the long-term downward trend.

Yet, the Japanese economy is still fraught with a number of challenges. Japan's snowballing fiscal deficits continue to pose a serious threat. A host of structural problems—topped by the demographic challenges of low fertility and a rapidly aging population—remain unaddressed. The recovery of the economy is giving some boost to the vitality of the private sector. However, in order to turn this momentum into a full-blown revitalization, it is crucial for companies to tackle its organizational and management structural problems.

During FY 2013, we conducted a broad scope of research activities, which culminated in the publication of nearly 200 discussion papers on economy and finance, social security, labor, energy and the environment, international trade policies, and so forth. In a bid to disseminate our research findings to the public, we hosted or cohosted a series of symposiums and seminars, including those held under the themes of human capital, the revitalization of Japan's economy, and natural resources and energy.

We are seeking to enhance collaboration and partnership with overseas research institutes. We are also dedicating efforts to develop and make available databases relevant to our research areas, collecting economic and industrial data as well as those on people's livelihoods. In FY 2013, in addition to updating the existing databases, we released a new database of nominal and real effective exchange rates by industry of the Chinese yuan and the Korean won and another one providing industrial productivity data of Japan's 47 prefectures,. The new industrial productivity database, called the Regional-Level Japan Industrial Productivity Database (R-JIP), serves as a useful reference in analyzing the inter-regional productivity gaps and industrial structure in Japan.

We will continue to focus on the key challenges facing the Japanese and global economies, conducting research conducive to policymaking and delivering our research findings in a timely manner as mandated by our mission. I appreciate your encouragement and continuous support for RIETI.